The anger and criticism — and even killing — that have wracked both sides of the Missouri-Kansas state line this year over residential property taxes largely miss the real point of what’s wrong with such taxes. It is their mere existence.
Giving local government the power to steal the roofs under which we sleep, maybe even after we have fully paid off a house, smacks of the days of debtor prisons. It is darkly Victorian and draconian.
My house does not go to school, check out library books, jump in the swimming pool or lead cops on chases down Metcalf Avenue. There may be an argument for taxing my house for part of the cost of streets, curbs, sidewalks, streetlights, and fire protection, but it can’t be expected to get a job and pay for other things.
Property taxes raise a question of constitutionality, because the general premise behind taxation in this country is that we should be taxed when we earn money and when we spend it but not for simply using something we have paid for.
Two faulty premises underlie the property tax: first, that it is possible for county employees to accurately determine the market value of a house and, second, that such a valuation reflects the owner’s ability to pay taxes. These assumptions are wrong.
Johnson County, where I live, claims that its appraisals reflect actual market values within a range of 10% above or below actual selling prices. That may be true as an average, but if you happen to be the person whose house has been appraised for many years well above eventual selling price, then you have effectively overpaid taxes year after year. Conversely, if your house sells for well above the appraisal then you’ve been getting a free ride at someone else’s expense.
For example, a house across the street from mine sold a year ago for slightly more than $500,000, but the county had it appraised for just $300,000. Those sellers came out well ahead in the tax game besides the nice sale profit. Another house near me sold for $900,000 a year ago when its county appraisal was less than $500,000. And a house in Mission Hills appraised for a bit more than $4 million sold recently for more than $6 million.
Real estate agents generally recommend pricing my own house at about $700,000, well below the county appraisal of $828,000. I’ve owned the house for 30 years, which suggests I’ve been paying more than a fair share of property taxes all of that time. Will I be able to sue for 30 years’ worth of refunds? I doubt it.
The other half of what makes property taxes so unfair is the lack of correlation between the value of the house and the household’s taxable income. Today, more than 60% of houses are owned by two-income couples, but more than a third by singles, whether never married, divorced, widowed, or in a situation with a disabled family member. There are many reasons why a household that once had two incomes is suddenly left with just one, but it isn’t easy to reduce one’s house size by half quickly.
The impact of this is starkly illustrated by statistics put together by the Lincoln Institute of Land Policy at Harvard, showing that 4% of the national population pay more than 20% of their income for property taxes, and 8% pay more than 10%. But nearly half pay less than 2 1/2%
A tax structure that takes the burden of education, parks, police and libraries off the backs of houses would eliminate part of this imbalance. Paying for those things through higher income or sales taxes would distribute the cost where it belongs: on individuals and their income and spending levels.
Shirley Christian is a former journalist who lives in northern Overland Park.
Most Popular
Comments / 0